Hottinger Stock Timing and Trading Signals

Dear Fellow Investor,

Tonight’s main headlines from the AP belong in "Believe it or Not, by Ripley."

Wal-Mart's profit rises amid dreary retail picture - AP
Budget deficit hits record; jobless claims surge - AP
October budget deficit hits record of $237.2B - AP
Foreclosure rates up 25 percent year-over-year - AP

And with this news the market rises some 500 points - - - GO FIGURE!!!

We wrote last night about euphoria, and today’s swing is a perfect example of the opportunities it provides to "take some money off the table." Wise investors build up their cash positions on days like this. They have placed their SELL limit orders using the Exit Zones - - - and if they are swing trading, then they also have in place their BUY limit orders, using the Entry Zones for the target.

You can expect more of these opportunities because there are many other gloomy headlines just waiting to be written. The worst is not over. The fat lady has not sung. The ping pong ball has not reached the bottom of the stairwell.

We urge you to protect your portfolio by knowing and using the E-Zones.

By way of encouragement, membership cost has been drastically reduced: you can track 10 stocks for just $9.95 a month - - - and for a monthly cost of just $17.50, you can track an unlimited number, complete with nightly email alerts. Further savings are available by using the extended Quarterly or Annual memberships. Act now! This is an opportunity that will not last.

Order your Gold or Silver service today: www.hottingersignals.com/order.jsp

You need to have your protective orders in place before the next big swing.

Kind regards,
Fritz H.

Dear Fellow Investor,

In previous letters we have said that "markets do not like uncertainty."

These words certainly bear repeating tonight, because the markets are getting ever-increasing doses of same - - - and are reacting just as one would expect - - - lurching severely downward on high volatility.

Much of today’s reaction can be explained by the fact that this latest dose of uncertainty was delivered by an entity we normally look to for help: our own government. (Was it Reagan who said the scariest words are: "We are from the government, and we are here to help you.")

When Secretary Paulson announced that his bail-out plan for the banks had been switched from buying troubled assets to providing capital, all hopes of ridding the bank balance sheets of their toxic paper were dashed. Those loans will remain on the books. No one knows their true value; and only the bravest of speculators will venture near them.

Thus, it will be a long time before the market clears itself. The economy cannot recover until the housing market is stabilized, and who knows when or how this will happen. Without a fix of this most important segment of our economy, house values will continue to fall; foreclosures will continue to rise.

Meanwhile, more uncertainties appear: regulators nix a credit card forgiveness plan. Then Detroit hears the rescue package is not for automobiles, so Congress helpfully waves the possibility of tax credits for auto buyers as a solution.

Those of us old enough to recall the slogan: "a car in every garage and a chicken in every pot" should not be surprised. But instead of giving us a tax credit, why don’t Reid and Pelosi just buy each of us a car? ‘Nuff said - - - the economy is in deep doo-doo.

Last month we expected the Dow to bottom at around 9,500. Given today’s events and the unresolved storms still on the horizon, we now expect the Dow to continue falling, and to reach 7,200 sometime during the 1st quarter of 2009.

That is 1,000 below where it stands tonight. Absent any sudden exogenous event, the decline will more likely resemble Chinese water torture: a slow, continuing erosion of value. Wise investors have already moved into cash, and more should do so as occasions permit. There will be moments of euphoria when individual stocks reach into their Exit Zones, and these are times to act.

Swing traders using the E-Zone system have been successful, especially with ultra ETF’s such as SDS, QID, QLD. With the VIX still at an historic level, these trading opportunities should continue.

For all, investors and traders, there should be ample opportunities to adjust your portfolios. Be patient. Do not act in panic.

With best wishes for brighter days ahead,
Fritz H.

Dear Fellow Investor,

Last Monday, Sept 29, we wrote you about the market in terms of a potential meltdown, adjusting our outlook for the Dow downward to 9,500 from a previous prediction of 10,200. Sorry to say, at 2:45 p.m. EDT the Dow came within 38 points (9,538.07) of our adjustment before regaining some of its loss to close for the day just above 10,000.

We doubt it will stay there - - - more bad news is on the way, and markets world-wide are in disarray as they struggle to accept the reality of what is coming. The words recession, depression, stagflation were all an anathema just weeks ago, but are now on the frontal lobes of economists around the globe. They should be on yours also.

The downtrend from this point may not have the volatility of these last weeks, but be assured, the slope of the trend is negative, and is not likely to turn upward until we are well into next year. Consider:

Government agencies (GSE's) like Fannie Mae, Freddie Mac, Ginnie Mae, etc hold over $5.4 trillion in residential mortgages. There are also $2.6 trillion in commercial mortgages to account for.
There is another $20.4 trillion outstanding in consumer and corporate debt, and who knows how much of it is, or will be, delinquent.
The government bailout only cleans up current delinquencies, if it does that. What about future debts going sour as the economy continues to dwindle? Economies do not turn on a dime, and not even on billion dollar bail-outs.
Congress has committed $700 billion for Wall Street, $200 billion for Freddie and Fannie, $85 billion for AIG, $25 billion for the auto industry, plus another $150 billion of pork to pass their package. This amounts to $1.160 trillion, on top of an OMB projected 2009 federal deficit of $482 billion. (www.moneyandmarkets.com)
Add to the above the continuing cost of military operations, and our picture grows dimmer by the week.

You have to ask yourself, where is this money coming from? Well, we either print it, which is inflationary because that drives down the value of the dollar relative to competing world currencies, making our imports (think, OIL) more expensive. Yes, a cheaper dollar would improve our export ability, but what do we truly have to export other than capital and technology? We long ago ceased to be a net exporter of manufactured goods.

If we don't print paper to meet such a deficit, then we are forced to borrow. As of early April, our foreign debt totaled $13.77 trillion, against a projected 2008 GDP of $14.4 trillion. Not a healthy ratio! Creditors are bound to ask higher interest for the ever increasing risk of holding our paper. Key creditors like Japan, (#1 at $583 bil), China, (#2 at $503 bil), even Russia (#8 at $65.3 bil) are not likely to cut us any slack. Nor are any of the others, like Britain, Luxembourg, Hong Kong, Switzerland; and especially not the oil-exporting states: Venezuela, the United Arab Emirates, Ecuador, Iran, Iraq, Kuwait, Oman. (www.kommersant.com/p-13150/foreign_debt/)

If growing were a viable alternative to printing or borrowing our way out of this dilemma, it would have been at the top of this list. But considering the poor fiscal situation we are now in, plus the likelihood of higher taxes and greater deficit spending after the election, the financial future of the U.S is not likely to carry a Triple A rating in world markets.

Thus we urge you to move to cash, preferably to a Treasury Bond Money Market. (FSIXX and VMPXX come to mind.) Do so prudently as your stocks re-enter their Exit Zones. Do not be anxious to average down until the Entry Zone has leveled out (does not slope downward) and the short term trend line is positive. We expect volatility to remain high over these next months due to continuing uncertainty here and abroad. Thus there should be ample opportunities to adjust your portfolios. Be patient. Do not act in panic.

With best wishes for brighter days ahead,
Fritz H.

Dear Fellow Investor,

Unless you were already invested in some of the contra funds we have been suggesting as anchors to windward, you are probably looking tonight at a portfolio of red, blinking arrows - - - meaning these stocks have dropped below their Entry Zone. A word of caution here: this is NOT the time to buy.

What the market experienced today was an exogenous event, not unlike an earthquake, hurricane, or a 9/11. These forces are unpredictable, yet great enough to move mountains, destroy cities, demolish buildings, and melt down portfolios.

In a post-script to our letter of Aug. 1, 2007, counseling against a "buy and hold strategy," we wrote: there have been many questions about "averaging down" right now. We suggest that you do so sparingly, and use the bottom of the Entry Zone as your guide. This should be leveling out, not sloping downward, before serious commitments are made to re-enter a stock or fund.

Hopefully, you followed that early counsel to avoid a buy and hold mentality, and have since built up your cash balance. But let the market settle a bit before you re-enter. Our prediction of the Dow declining to 10,200 is near at hand, but given the uncertainties of the moment, 9,500 is a now more probable bottom.

We continue to urge care and caution, and to utilize the value of your E-Zone System as the volatility index (VIX) declines and your Entry Zones level out.

HottingerSignals Admin Team

Dear Fellow Investor,

With all due respect to those optimistic market prognosticators who still see the glass as half-full, we offer you some continuing words of caution:

There is more pain to come. The fat lady has not yet sung. In fact, she has more lives than a cat. And, the ping-pong ball has not yet reached the bottom of the stairwell - - - it occasionally gets carried up a few flights by well-meaning passers-by - - - but gravity will prevail.

We wish there were something on the horizon to erase our pessimism, but from our viewpoint economic storm clouds continue to gather like hurricanes off the Atlantic Coast: as soon as one blows itself out, another appears. Just when the market thought the real estate crunch had been factored into reality, more studious gurus decided it was only the residential segment of the market that had been revalued - - - now we must watch commercial real estate plunge as strip malls go empty, trend and big box stores close, and factories disappear.

Add more bad news: miserable unemployment numbers and its negative effect on gross disposable income; growing doubts about the financial strength of Fannie and Freddie and their now not so inevitable Federal rescue; continuing turmoil in the automotive, airline, and financial sectors. It all adds up to more volatility and a continuing loss of confidence in the market.

We do not expect things to settle down until after the November election, when the economic direction of the country will be more clearly defined. Meanwhile, our crystal ball still shows the Dow dropping down to the 10,000 level.

For those investors watching their principal shrink with these 3-digit Index plunges like the one on Sept 4, (Dow down over 300 points), there is still time to put out an anchor to windward with some contra funds. We like SDS, which moves up twice the percentage of a drop in the S&P 500. (A cautionary note: it also drops twice as fast when the S&P 500 rises.)

	Price	Div	Yield
CRT	48.68	3.91	8.03%
DOM	22.75	2.61	11.47%
HGT	29.29	2.73	9.32%
PBT	23.61	2.13	9.02%
SBR	63.15	5.05	8.00%

For those investors seeking to maintain revenue in the face of dividend reductions and the insidious inflation which erodes purchasing power, we suggest royalty trusts such as DOM, PBT, SBR, CRT, HGT. (Note: PBT and HGT were recently removed from Dividend Daily?s recommended list, but still carry better than 3 stars out of 5).

These strong, well-managed natural resource trusts should be able to increase dividend flow as inflation raises the value of their underlying assets. However, investors seeking to add such stocks to their portfolios should time their purchasing with the E-Zone System. There is no wisdom in paying too much for any stock, no matter what its dividend might be. Know the Entry Zone before you buy.

With matters as serious as they are right now, you should also be using a Gold membership to protect your entire portfolio: to know the Exit Zones for those stocks that are extremely volatile and offer swing trade opportunities; and to know the Entry Zones for those stocks you want to average down on or buy again for another swing trade. (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

We wish you much success in the turbulent days still ahead.

Hottinger Admin Team

PS: Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money. Just make your request and send him this address: http://www.hottingersignals.com/cobrand.jsp

PPS: (Hottinger Capital and clients hold long positions in HGT, PBT, SDS)

Dear Fellow Investor,

One of the results from our recent survey was a request for some trading tips - - - we seem to have many swing traders on board, and we will soon have a forum in which both traders and investors can exchange ideas and strategies for using the E-Zone System.

We have never before published any tips, and tonight's letter is not to be construed as investment advice.

YOU NEED TO DO YOUR OWN DUE DILIGENCE PRIOR TO ANY TRADING OR INVESTING.

With that warning in place, if you are looking for a trade for Monday, July 28, investigate ISYS and PLXS. Both have made recent gains on good volume.

ISYS has a PEG of 0.93, a Beta of 0, and its recent price swings have exceeded 10%. Using the E-Zone System, sell if Open > $44.93 - - - buy if Open is < $43.51.

PLXS has a PEG of 0.98, a Beta of 0.66, and its recent price swings have exceeded 5%. Using the E-Zone System, sell if Open > $29.85 - - - buy if Open is < $28.99.

Set targets and stops according to your personal trading strategy and tolerance for risk.

HottingerSignals and its affiliate, Hottinger Capital Consulting, will never participate in trading stocks or options on any suggestion posted on its website or in these letters to investors.

With best wishes for your success,
Hottinger Admin Team

Dear Fellow Investor,

If the first 2 weeks of trading are any indication, these next two quarters will be a very bumpy ride indeed, with steeper drops to come. The ping pong ball still has not reached the bottom of the stairwell. And though she is now on stage, the fat lady has not yet sung.

Back in October, we cautioned about 4 Horsemen of the Apocalypse appearing on the horizon, posing a threat to our stock market. They were Fed Policy, Economic Data, Corporate Quarterly & Annual Reports, and Political Events. Well, they each have arrived - - - and from all appearances, they will not soon depart. In general, stock markets are fed by 4 forces: economic growth - profit growth - interest rates - inflation.

Regardless of whether these market factors are viewed in the lens of a past, present, or future tense, we here in the U.S. are facing the worst of all scenarios - - - the economy and profits are slowing, not growing, while inflation is rising, and interest rates are soon to follow. (There is little room for Mr. Bernanke to do any cutting, and sooner or later the dollar does have to be defended.)

Recent statistics have been miserable to read: Dow and S&P now in bear territory; Fannie Mae and Freddie Mac at their lowest prices since 1992; weekly jobless claims topping 400,000 (another sign of economic weakness); Wachovia, second-largest chain of U.S. banks, expecting a second quarter loss of $2.6 to $2.8 billion; General Motors fighting bankruptcy rumors.

We could fill more paragraphs with similar notes, but by now you have the picture. Our economy is in deep doo-doo, is not likely to emerge soon, and there is more bad news to come. Continuing to cloud the future is the fact that our U.S. economic problems are now affecting other major world economies. This bout of global flu will have to run its course, and that means our trading partners in Europe and Asia will have to suffer. And much like the U.S., there will be no quick fixes for them either. As a famous econ professor put it, "economies are like ocean liners; their momentum prevents any quick change of course."

We expect that before things turn around the Dow will have to reach the 10,200 area. A similar drop for the S & P would take that index down to the 1,100 range. Given no exogenous events like earthquakes, terror strikes, or missile launches to create a sudden drop, the best analogy remains the ping pong ball, bouncing down the stairwell.

Such an up and down scenario will present many opportunities for traders, and also for investors looking to average down on their holdings. Income seekers should investigate Canroys like HTE and PWE. Value seekers should be looking at stocks like MVO, CLR, ME.

More cautious investors should consider adding some SDS on its drops. Obviously, you should do your own due diligence, and then consider using the E-Zone System to find your best entry points - - - and especially those exit points if you are trading.

To give you a greater opportunity to monitor your holdings in this turbulent market we are briefly extending our free trial from 10 to 30 days for the first 50 who sign up tonight. http://www.hottingersignals.com/order.jsp Take advantage of this limited offer; it will allow you to track 5 of your most important stocks or funds for 30 days.

However, with matters as serious as they are right now, we urge you to consider a Gold membership and begin immediately to protect your entire portfolio. (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

Those of you who have already moved to cash can still use the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. Caution is advised; and unless you are trading, we suggest using the Entry Zones on the weekly charts.

We wish you much success in the turbulent days ahead.

Hottinger Admin Team

PS: Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money. Just make your request and send him this address: http://www.hottingersignals.com/about.jsp#cobrand

PPS: (Hottinger Capital and clients hold long positions in HTE, PWE, SDS, MVO)

Oil Crisis? Let's get real - - - It's a DOLLAR CRISIS ! ! !

Dear Fellow Investor,

For the past several weeks the major news and financial channels have been giving us bold headlines to tell us we are facing an oil crisis (as if current $4 / gallon pump prices had not already made us aware of the situation.) With all the staff at their disposal, they should be able to talk/write plainer than this. Try "Dollar Crisis," folks.

When Roosevelt took the dollar off the Gold Standard and foreign countries were no longer able to exchange our paper for gold, we forestalled the inevitable immediate dumping of dollars that would have occurred by making a treaty with Saudi Arabia: the Saudi royals would thenceforth accept only US dollars as payment for their oil, and we would give them the protection of our military might. This created a perpetual world demand for our dollars, and kept them in continuous global circulation since all countries now needed U.S. dollars to buy oil.

In most of the Mid-East countries that can still be called friendly, oil continues to be priced in dollars. Exceptions like Kuwait and Iran have moved to pricing in Euros, something Saddam Hussein threatened to do before he was removed; but the Saudis continue to honor their pledge to price in dollars in exchange for our protection.

The Saudis can, to some extent, control the price of oil by how many barrels they pump daily - - - in other words, doing their best to balance demand with supply. What they cannot control is the value the world sees in our paper dollar. World opinion of our currency is beyond control of the Saudis, and certainly beyond our own control. Witness the lack of world enthusiasm for those continuing pronouncements from Bernanke and Paulson. These spokesmen for defense of the dollar have scant ammunition left at their disposal, and the world knows it. Thus it is likely to be a long, cold, dark, expensive winter.

Extrapolating from this premise, we see the markets continuing to slide, and the eventuality of seeing the Dow coming to rest somewhere near 10,200. We hesitate to continue issuing such dire warnings, and pledge you a very prompt alert the moment we see a change in the weather. Meanwhile, we urge you to put your portfolio into a defensive mode.

If you have not already taken some defensive measures, it is still not too late. You need to know where and how to begin lightening up. You can get a great start by using our E-Zone System to read the Exit Zones of your stocks and funds. Our Guest Membership will allow you to track 5 stocks or funds for 10 days.

But with matters as serious as they are now, we urge you to protect your entire portfolio. Choose a Gold membership tonight. You can order right here! (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

Those of you who prudently moved to cash can now use the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. Caution is still advised; and unless you are trading, we suggest using the Entry Zones on the weekly charts.

We wish you much success in the turbulent days ahead.

Hottinger Admin Team

Dear Fellow Investor,

Over the past several months we have written you about the state of the market, urging caution based on our view that the worst is yet to come, that the fat lady is not yet on stage, and the ping pong ball has not reached to bottom of the stairwell. (see recent letters below)

With increasing confidence we continue to hold to this view. And here is why:

There is little the Fed can do to alter the shrinking value of the U.S. dollar, other than to raise interest rates. And in the face of our sinking economy, such an act would be tantamount to shooting holes in the lifeboat we presently occupy. Smart investors abandoned ship several months ago, along with most of our trading partners who no longer want to hold our dollars. They no longer see our U.S. currency as a stable, reliable store of value.
This is why it now takes 1.57 U.S. dollars to purchase 1 Euro, and why countries like the Ukraine are adjusting their currency pegs against the dollar (to keep from over-inflating their own economies). Here in the U.S. we will continue to feel the pain of inflation coupled with a declining economy, otherwise known as stagflation. We were reluctant to use this word some months ago, but it now appears as the most honest way to describe the coming months.
The U.S. consumer is under siege: the housing bubble has burst (worst drop in 17 years); lending ability of the banks is diminished; gasoline and heating fuel continue to rise in concert with oil prices (in spite of U.S. Senators berating oil industry executives in a blatant display of officious politicking); food prices continue to climb (with help from a non-partisan Congress that continues to buy itself campaign donations from long-entrenched and undeserving farm lobbies - - - see the latest subsidies granted to sugar, wheat, corn, that put domestic prices well above world price).
Uncertainties undermine markets, and our market has a plethora of them. The earliest to be resolved is which party will occupy the White House in 2009. Given pledges of the 2 Democratic candidates, there will be a multitude of federal dollars poured onto the populace, all to be paid for with higher taxes. Astute investors recognize this for what it is: political posturing. But should it come to pass, it is a recipe for further economic decline and higher inflation.
There are international issues which are not likely to soon be resolved: AlQaida, Iraq, Iran, Syria, Lebanon, Venezuela, N. Korea. Any one of these heating up would add further instability to an already unstable world economy.
The PE ratio for the S&P 500 is at an historic level, with little of substance to retain it there. Corporations are re-writing their quarterly and annual projections to reflect falling revenue and earnings. There is nothing on the near horizon that would create positive revisions to boost market confidence.
The funny-money mortgage mess is not confined to the U.S. - - - it was spread world-wide - - - and it is far from being cleaned up. Expect to see further asset write-downs and crowded exit doors as awareness grows.
Lastly, the U.S. Congress continues to manipulate facts and data in their effort to put a "best face" on the current situation. How else would you explain the use of a "core inflation rate" that excludes the categories of food and energy? That low number may look good in print, but it does nothing to put more discretionary dollars into consumer pockets.

Given the above, we urge you to take some defensive measures. It is still not too late. You need to know where and how to begin lightening up. You can get a great start by using our E-Zone System to read the Exit Zones of your stocks and funds. Our Guest Membership will allow you to track 5 stocks or funds for 10 days.

But with matters as serious as they are now, we urge you to protect your entire portfolio. Choose a Gold membership tonight. You can order right here! (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

Those of you who prudently moved to cash can now use the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. Caution is still advised; and unless you are trading, we suggest using the Entry Zones on the weekly charts.

We wish you much success in the turbulent days that are yet to come.

Hottinger Admin Team

PS//
Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money. Just make your request and send him this address: http://www.hottingersignals.com/cobrand.jsp

PPS//
An apology to anyone who thinks we were too harsh on our leadership in Washington. The intent was to inform our investors, not to create a political dialogue.

U.S. Dollar Index 1995 – 2008 US $ vs. basket of currencies
(Euro, Yen, Pound Sterling, Canadian $, Swedish Krona, Swiss Franc)

Dear Fellow Investor

In previous letters we have written that "the Fat Lady is not yet on the stage," that our troubles have not ended. The graph above should confirm this point. Our Dollar, when measured against a basket of foreign currencies, has been below 100 (parity) since early 2003, and having dropped below 80, is now making monthly, if not weekly, new lows (perhaps that should be spelled "weakly").

Since 2006, it has shown little or no resilience - - - and this downtrend is very likely to continue for reasons we have enumerated in the past, and will repeat here for emphasis:

Markets hate uncertainty, and it abounds right now, both in the U.S. and abroad. Our coming Presidential election is a toss-up. Al-Queda, Iraq, N. Korea, Iran, Venezuela combine to cloud our future - - - the latter two with some ability to impact oil supply and its price.
Iran has threatened to stop taking US dollars for oil, and may already have put this boycott of our currency into play. If it is followed by others, demand for US dollars will drop significantly, and that line on the chart above will fall even further.
Mr. Bernanke is facing an impossible situation: His effort to shore up the banks and their collateralized mortgage mess, plus strengthen the housing market, with lower interest rates works at cross-purpose to a strong dollar. Since Congress also demands that the Fed protect the dollar, this means interest rates will undoubtedly have to rise. But no one knows when. A higher cost of money will contribute to a further slowing of the economy - - - and who wants more of what we are already experiencing? We are now in the early stage of a recession. Higher interest rates would likely cause stagflation - - - something to be avoided at all costs. Mr. B’s hands are tied, and the world knows it.
Our national debt continues to rise to the stratosphere, and it is being monetized as fast as Washington can print the paper. Of course, this just adds more downward pressure on the dollar, and to our Dollar Index chart.

The resulting conclusion we draw from all these facts is not one of immediate promise for a market turn-around. Rather, it is more likely that the economy will continue to drift in the doldrums, at least until after the November elections. By then we will know who is in charge, what policies will be pronounced, whose ox will be gored, and who the beneficiaries and the payers will be. Yes, there will be future days when the market gives us an exhilarating upward boost - - - but remember, it is just the ping-pong ball bouncing as it travels down the stairwell. It has not yet reached the bottom and the fat lady is not yet on the stage.

If you have not already taken some defensive measures, it is still not too late. We urge you to take protective action right now. You need to know where and how to begin lightening up. You can get a great start by using our E-Zone System to read the Exit Zones of your stocks and funds. Our Guest Membership will allow you to track 5 stocks or funds for 10 days.

But with matters as serious as they are, we urge you to protect your entire portfolio. Choose a Gold membership tonight. You can order right here: http://www.hottingersignals.com/order.jsp (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

Those of you who prudently moved to cash can now use the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. Caution is still advised; and unless you are trading, we suggest using the Entry Zones on the weekly charts.

We wish you much success in the turbulent days that are still ahead.

Hottinger Admin Team

PS//
Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money. Just make your request and send him this address: http://www.hottingersignals.com/cobrand.jsp

PPS// If the chart does not appear, it can be seen on our website at E-Mailed Alerts www.hottingersignals.com/ea.jsp

Dear Fellow Investor,

Have you ever watched a ping pong ball bounce down a flight of stairs? Well, that illustrates what the market is doing.

Don't let these 200, 300, 400 point bounces fool you - - - the ball has not yet reached the basement. And as we said a few weeks ago, "the fat lady hasn't sung - - - in fact, she isn't even on the stage."

We hate to sound negative after such a spectacular day, but we also hate to see you buy into an upswing that cannot last. There are just too many unresolved problems that astute investors will not ignore:

This tulip-mania that hit the mortgage markets is similar to the junk bond crisis of 1989, except that it is greater by a factor of 10 (some 17 Trillion of debt is in jeopardy) and this is spread worldwide. The problem will not be solved with U.S. interest rate cuts, or by the U.S alone.
At some point these interest rate cuts will have to be reversed. The Fed's primary duty is to support the dollar and control inflation, not bail out investment banks and Wall Street. And almost daily the dollar is setting new all-time lows against stronger foreign currencies.
Employment and payrolls continue to shrink. Consumers have less discretionary income. The coming tax rebate is at best a very poor patch on a deflating economy - - - one spare tire (and a mini at that) when all 4 are going flat.
At the same time, commodities and their indexes continue to set all-time highs: Gold is bouncing around $1,000/oz, oil is over $100/bbl. This is a recipe for an onset of stagflation, a word we were reluctant to use in earlier warnings.
Uncertainty continues to plague the market: the world?s hot spots offer us a crisis du jour, and it will be November before we learn who will lead us out of the desert (no pun intended) and what our national tax policy will be.

If you have not already taken some defensive measures, it is still not too late. We urge you to act right now. You need to know where and how to begin lightening up. You can get a great start by using our E-Zone System to read the Exit Zones of your stocks and funds. Our Guest Membership will allow you to track 5 stocks or funds for 10 days.

But with matters as serious as they are now, we urge you to protect your entire portfolio. Choose a Gold membership tonight. You can order right here: http://www.hottingersignals.com/order.jsp. (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

Those of you who prudently moved to cash can now use the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. Caution is still advised; and unless you are trading, we suggest using the Entry Zones on the weekly charts.

We wish you much success in the turbulent days that are yet to come.

Hottinger Admin Team

PS// Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money. Just make your request and send him this address: http://www.hottingersignals.com/cobrand.jsp.

Dear Fellow Investor,

Yes, the markets dropped big time today - - - but it "ain't over "til the Fat Lady sings." And she isn?t even on stage yet! On Oct. 26, 2007, we wrote: Let's try to put things in perspective. First, with the Dow now above 13,000 a swing of 1 or 2 per cent can mean 130 to 260 points in a day - - - and daily variations of 1 or 2 per cent are common. It is the 10, 15, 20 per cent hits that will hurt, and those are well within the realm of possibility. All we saw today was a 2.5% drop!

On Nov. 11, 2007, our words of caution read: The fall the market took last week is not the end. It will take many months for events to run their course. We have only experienced a slight loss in the Dow thusfar. A 15% correction would take us down to 11,000 - - - and a drop of that magnitude is historically achievable and well within the realm of reason. We still have a long way to go! (see chart below)

On Jan. 4, 2008, we wrote: a drop to 10,200 is very likely - - - and we still hold to that. The Fed is in a box and there is no easy or quick solution to fixing the bubble we face today: overindulgence in mortgage and derivative paper. Yes, Mr. B will reduce interest rates, hoping that by doing so the banks will begin to extend credit and that this will help the economy.

However, our economy is consumer-driven. With our Dollar at an all-time low against other currencies, with Oil over $100/bbl and Gold near $1,000/oz, we ought to understand that the lowering of interest rates will add further pressure on the Dollar, and this in turn adds to the inflationary pressure on the consumer. His discretionary income is reduced. This is the making of a recession. Add the inflation we are already feeling, and you have Stagflation, a word we used in our letter of Jan. 4.

If you have not already taken some defensive measures, it is still not too late. We urge you to act right now. You need to know where and how to begin lightening up. You can get a great start by using our E-Zone System to read the Exit Zones of your stocks and funds. Our Guest Membership will allow you to track 5 stocks or funds for 10 days.

But with matters as serious as they are now, we urge you to protect your entire portfolio. Choose a Gold membership tonight. You can order right here: http://www.hottingersignals.com/order.jsp. (Quarterly and Annual categories offer the best savings, and of course, you have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

Those of you who prudently moved to cash can now use the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. Caution is still advised; and unless you are trading, we suggest using the Entry Zones on the weekly charts.

We wish you much success in the turbulent days that are yet to come.

Hottinger Admin Team

PS// Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money. Just make your request and send him this address: http://www.hottingersignals.com/cobrand.jsp

Dear Fellow Investor,

Today was not pretty for most investors. That 250 point decline in the Dow (a drop of just 1.96% ) hammered stocks in all markets: 25 NYSE stocks were down 10% to 16%; and for 25 NASDAQ stocks the losses ranged anywhere from 13% to 59%.

The first lesson to be learned here is that investors must stay focused on their individual holdings, and not so much on "the market" - - - it is much more a market "of stocks" than it is a "stock market." This can be a painful lesson when the Dow drops just 2% as it did today, while your APPLE drops 7.6% and your INTEL drops 8.11%. You need to know your Exit Zones; (also your Entry zones if you are averaging down on the drops.) We hope you will excuse us as we repeat for emphasis some paragraphs from warnings that began last Fall: (please see www.hottingersignals.com/ea.jsp for full transcripts)

October 26, 2007 DENIAL
Dear Fellow Investor,

THE NUMBERS ARE FRIGHTENING - - - WHERE IS REALITY?

Today oil hits a new high above $93 a barrel, and specialists expect to see it over $100 before yearend. The Euro makes a new high against our dollar ($1.43++).

Yet with this news the stock market climbs some 100 points. Go figure!

Let’s try to put things in perspective. First, with the Dow now above 13,000 a swing of 1 or 2 per cent can mean 130 to 260 points in a day - - - and daily variations of 1 or 2 per cent are common. It is the 10, 15, 20 per cent hits that will hurt, and those are well within the realm of possibility, especially as our warning indicators begin to blink faster.

The proprietary indicators we follow have moved from a stage 1 cautionary into the stage 2 danger zone. Only stage 3, severe risk alert, is left on the scale. (NOTE: Stage 3 was reached today.)

Nov 11, 2007 The R Word
Dear Fellow Investor,

These notes of caution began in mid-April when the Dow was first approaching 13,000. - - - Why did we issue these warnings? Because the rise in the Dow was being followed by a rise in the VIX (Volatility Index) - - - and when the VIX reaches the top quadrant of its 52 week range, that usually foretells a serious market correction. Right now this index is reaching levels it has not seen since late 2002, early 2003.

The fall the market took last week is not the end. It will take many months for events to run their course. We have only experienced a slight loss in the Dow thusfar. A 15% correction would take us down to 11,000 - - - and a drop of that magnitude is historically achievable and well within the realm of reason. (10,200 is now more likely)

Why have we been singing this song all these months? Well, there were too many factors that could not be ignored. In September we posted these uncertainties, and not one of them looks any better today: (Nor today)

A domestic political struggle, with the end not in sight until Nov, 2008.
An unpopular war in Iraq, with outcome still unknown.
Decades of unsettled Israeli / Arab tensions.
Expansion of al Qaida networks inside the EU.
Disappointing economic numbers being posted almost weekly.
The Fed handcuffed. Massive foreign holdings limit its ability to lower interest rates.

Now consider these more recent news items to understand the market’s dilemma:

China decides to reduce risk and hold fewer U.S. dollars
Uncertainties abound in Iran, Pakistan, Venezuela
Massive, unresolved $100 billion mortgage-backed securities risk;
Dismal housing market and rising jobless claims;
Oil approaching $100 / bbl;
Gold nearing $800 /oz.;
One Euro now costs $1.46

Given all the events in the past few weeks that have impacted the market, plus those earlier unresolved ones, wise investors are in a defensive mode. Earlier we cautioned that the "R" word was a strong possibility. The way events are now playing out, particularly with Fed actions, we are inclined to think stagflation, the "S" word, is more likely than a recession.

If you have not already taken some preventive measures, it is still not too late. We urge you to act right now. You need to know where and how to begin lightening up. You can get a great start by using our E-Zone System to read the Exit Zones of your stocks and funds.

With matters as serious as they are at the moment, we urge you to protect your entire portfolio. Take advantage of our Special Offer, which closes midnight, Jan. 6^th. You will get 6 months of service for just one quarterly payment. Act Now! Order right here: http://www.hottingersignals.com/order.jsp (An Annual category still offers the best savings, and of course, you always have the protection of our satisfaction guarantee: a full refund in the first 30 days if you are not completely satisfied.)

Those of you who are prudently moving to cash as this turmoil plays out will also be using the E-Zone System to find profitable re-entry points for those stocks you want to rebuild. Caution is still advised; and unless you are trading, we suggest using the Entry Zones on the weekly charts.

We wish you much success in the turbulent days to come.

Hottinger Admin Team

PS// Ask your broker to provide the E-Zone charts for you on his website. This program is available for him, and the arrangement could save you both time and money. Just make your request and send him this address: http://www.hottingersignals.com/cobrand.jsp